Unusual respite from surging health care costs

By Ricardo Alonso-Zaldivar Associated Press

Posted:
01/07/2013 05:33:44 PM PST

Updated:
01/07/2013 05:33:44 PM PST

WASHINGTON -- Americans kept health care spending in check for three years in a row, the government reported Monday, a respite that could linger if the economy stays soft or fade like a mirage if job growth comes roaring back.

The nation's health care tab stood at $2.7 trillion in 2011, the latest year available, said nonpartisan number crunchers with the Department of Health and Human Services. That's 17.9 percent of the economy, which averages out to $8,680 for every man, woman and child, far more than any other economically advanced country spends.

Still, it was the third straight year of historically low increases in the United States. The 3.9 percent increase meant that health care costs grew in line with the overall economy in 2011 instead of surging ahead as they normally have during a recovery. A health care bill that grows at about the same rate as the economy is affordable; one that surges ahead is not.

The respite means President Barack Obama and lawmakers in Congress have a window to ease in tighter cost controls this year, if they can manage to reach a broader agreement on taxes and spending. Health care spending is projected to spike up again in 2014, as Obama's law covering the uninsured takes full effect.

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"Economic, income and job growth in 2011 was modest and less than might normally be expected during an economic recovery," said the report from the government's National Health Expenditure Accounts Team. "This fact raises questions about whether the near future will hold the type of rebound in health care spending typically seen a few years after a downturn."

More people gained health insurance as a result of the health law's requirement that young adults can stay on a parent's plan until age 26. But employers increasingly steered workers and families into high-deductible health plans, which come with lower monthly premiums but require patients to pay a greater share of their bills out of their own pockets.